Consumers are increasingly aware of the detrimental effects of sugar on overall health. This is driving the rising demand for low/reduced sugar alternatives in both food and drink.
The drivers
Consumers are moving away from sugar in every way as this established trend continues to change the focus of new product development in most beverage categories. Increasing media scrutiny and celebrity health gurus are fuelling the fire and promoting a low sugar or sugar free diet. This results in 43% of consumers actively trying to reduce their consumption of sugar, according to a consumer survey from Global Data in Q4 2016.
With an increased knowledge of sugar’s detrimental impact on health, not least weight gain and diabetes, it now means an increasing number of consumers now perceive sugar to be bad for their health. Approximately 39% of consumers are extremely concerned with diabetes either now or in the future. As a result, consumers are paying far more attention to sugar content when making purchasing decisions, demonstrated by a consumer survey from Global Data in Q4 2016 stating 48% of consumers are actively choosing soft drinks with low or no sugar levels.
Consumer demand has led the advancements in low calorie sweeteners and refined sugar alternatives, especially natural solutions such as stevia and increasingly more rare sugars like monk fruit extract or coconut sugar, with the choices easily accessible to consumers now far more varied that just a few years ago.
The challenges
An almost contradictory trend is establishing itself within the anti-sugar rush as diet alternatives fail to set the beverage category alight. The diet category is performing poorly as consumers defer from artificial sweeteners.
Consumers looking to reduce sugar are more likely to switch to a category with more perceived health benefits such as waters and functional drinks, offering nutritionally beneficial calories and using natural alternatives to artificial sweeteners.
This isn’t simply confined to carbonated beverages as consumers look to eliminate sugar across the board.
For formulators, there is the challenge of keeping up with the pace of NPD of products providing or supporting sweetness but equally this allows them huge opportunities.
What’s out there
There is no shortage of brands tapping into the ‘healthy hydration’ trend. We’ve seen cold pressed juices breaking into the soft drinks sector boasting 45% less sugar than regular fruit juice. Non-dairy milks tend to contain water/cane sugar, we are now seeing alternatives such as coconut milks coming through that are naturally sweet. There is also an increasing number of functional beverages from waters to natural energy drinks with less than 1g of sugar per bottle along with all organic or natural ingredients.
The future
We will continue to see brands re-positioning to stay present in the sugar free conversation. With lots of opportunity for ingredient and product innovation as consumer reactions to conventional sugar, low-calorie alternatives and NPD in other beverage categories continues to evolve.
We will see more developments in natural low-calorie sweeteners with for example natural, zero calorie ingredient solutions, made from sugar cane, increasingly used alongside natural sweeteners to negate the unpleasant and lingering aftertaste often associated, so that consumers don’t have to sacrifice taste along with calories.
Fruit and vegetable juices will be the highest growing segment in the sugar free beverage market. In particular Technavio's analysts forecast the global super fruit juices market to grow at a CAGR of 11.67% during the period 2017-2021.
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